Walmart Releases Its Roadmap to GHG Accounting

Walmart made a major commitment in February to reduce the carbon footprint from the lifecycle of its products, including its supply chain, by 20 million metric tons of carbon dioxide between now and 2015. This is equivalent to the annual greenhouse gas emissions of 3.8 million passenger vehicles.

The project team that has been working to implement that goal publicly released a guidance document Wednesday that details how emissions reductions are to be counted.

Environmental Defense Fund (EDF) has been working with Walmart and pushing them hard over the past five years. We have a unique relationship -- we don’t take money from Walmart, or from any of our corporate partners, and EDF is the only environmental group to have a dedicated staff working on the ground in Bentonville, Ark., where Walmart has its headquarters. This climate commitment was, in our view, the missing link in Walmart’s sustainability agenda.

So while the U.S. Congress remains stalled on climate change legislation, Walmart is not waiting around. The company has made the clear case that addressing operational and supply chain opportunities today can be great for business as well as the environment. More specifically, Walmart is moving forward with a project that:

So how will this work in practice? Our project team collaborates with Walmart buyers, merchandise managers and company leaders within Walmart’s business units to identify projects that could achieve a significant carbon reduction. The team is prioritizing products with the following qualities:

1. Products with significant greenhouse gas emissions in their lifecycle, whether in their manufacture, transport or use
2. Top-selling items at Walmart that are potentially big carbon wins, such as bread, clothing, and pork, along with taking Walmart’s CFL campaign to markets outside the U.S.

Our team also engages with suppliers to implement reductions, and then works to quantify those reductions and assess any claims of reductions.

Qualification, Quantification and Assessment

It’s the qualification, quantification and assessment of reductions that led our team to create a guidance document that establishes “rules” for counting carbon reductions towards Walmart’s 20 million metric tons goal. The team behind this framework was led by ClearCarbon Consulting, along with EDF, PricewaterhouseCoopers (PwC), the Carbon Disclosure Project (CDP) and Walmart.

Walmart will calculate carbon reductions for each project by using this framework, which outlines the qualification criteria for the project, as well as rules for accounting for emissions reductions and, most importantly, assuring that they are real. This guidance is built upon standard carbon accounting procedures, but recognizes that aspects of this project (e.g., Walmart’s ability to market better products) are unique and thus need to be specifically addressed. This document was designed as an internal tool for our project team.

So why are we making this document public? One of the defining tenets of meaningful sustainability, and increasingly of business in general, is transparency. This is a concept that many of us at EDF have been pressing with Walmart for years.

The good news is that transparency is increasingly a core part of how Walmart now does sustainability. Take a look at their latest sustainability report to see what I mean. Our project team decided to put this guidance document out there so everyone could see how we are striving to make sure our work is meaningful and real.

We hope that the carbon accounting geeks out there and any others interested in spending the time carefully and thoughtfully reviewing the document will pass on helpful insights about how to change and improve it.